Flinder Valves and Controls Inc

2607 Words May 10th, 2011 11 Pages
In this case study, we will talk about negotiate a possible acquisition of Flinder Valves and Controls. Inc by RSE International Corporation. To know why they gave that decision and how they could do it. We will have an overview of these two companies.

1. Overview of Flinder Valves and Controls. Inc and RSE International Corporation 1.1 Flinder Valves and Controls. Inc
Flinder Valves and Controls. Inc (FVC) was an American company, located in Southern California. FVC was an outgrowth of a small company established in 1980 for engineering and developmental work on an experimental heat-exchanger product. In 1987, Flinder Valves and Controls Inc. was organized to acquire the properties of the engineering corporation. Bill Flinder,
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Additionally, FVC needed to fund and expand their research & development activities, and a well-financed partner capable of supporting that would be a good solution. As you know, RSE and FVC were two success companies. They had advantages in products, in technology. According to consolidated Earning and Dividends for FVC and RSE, their sales and their net income increased from time to time. Although FVC was a small company but they had many advantages. For example, The raw material used by company were supplied from a number of competitive suppliers. This would bring to FVC goodwill, such as price, payment methods… FVC had a good system distribution. They had staffs of skilled sales engineers. The Auden Company, a large firm in related field, was an important foreign distribution channel under a nonexclusive distributor arrangement…. FVC is debt free and for the past 6 quarters its stock price has been increasing steadily. With a beta equal to one, the company’s stock price will move with the market and is in-line with its industry. On the other hand, RSE had adopted an aggressive growth-by-acquisition program aimed at diversifying the company’s markets and prospects. And RSE had the financial capacity to execute such a program. It is a good time for both companies to take advantage of the synergies of merging together (i.e.
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